Oddbean

Consolidated some utxos this morning. Not normally exciting but a couple firsts for me. 1 first transaction singed by my airgapped coldcard 2 first transaction broadcast from my own node via sparrow The full self sovereign setup isn't that hard. If I can do it you can too. LFG

I recommended using the open source tool I built to help understand the effects of your consolidation before you consolidate. https://m.primal.net/KjkJ.mov https://github.com/Jwyman328/LiveWallet/releases

quick question, what is a good size for UTXOs? it sorta seems to me for privacy reasons it would actually be good to have like 100-200ksat UTXOs so you can selectively spend them without that activity directly linking to the rest

Privacy and utxo efficiency in regards to fees are often at odds. For privacy I think it would be best to have various sized utxos (to a degree, obviously not too too small) since you often have various sized payments. You don't want to have lots of 100-200k sat utxos and then make a payment for 5 million sats, resulting in having to combined a bunch of utxos which is often bad for privacy. But as you insinuated it isn't good to have utxos that are too large, since that means if you make a small payment with a large utxo then the recipient is aware of a significant portion of your wealth which is not good for privacy either. As well the recipeint can track your future transactions since you will most likely be using the change output you received for future payments since it is a large portion of your wealth. Overall I think various sized utxos are good for privacy. Most utxos you don't plan on spending soon should be 1 million sats an above due to fee efficiency.

yeah, that was what i was thinking... i already have a broad distribution, i'm going to explore how to make this happen more automatically i can imagine a coin control system that automatically generates change addresses in this way for you so that your coin selection is always mixed up and it prefers the oldest ones for new transactions i have to think more about how this would work in the simplest way a simple algorithm is hard to break and has the best chance of becoming standardised across implementations, so, a coin selection algorithm that is simple and increases privacy would probably get adopted i have a lot of visual thoughts about how these things work exactly, the famous japanese artist who is making 3d prints visualising them, this is the linear map of them but not the size, the same distribution pattern in users own wallets i think would be a huge boost in privacy, especially if it aims to create the most tenuous locality possible - by trying to use the oldest UTXOs always and trying to avoid numbers of change outputs, it's a fun puzzle to think over, how to make wallets by default be harder to chainanalyse

Absolutely, those are great ideas, we definitely need more apps tackling these problems. Wallet fingerprinting is a big goal of chain analyze so having more privacy related standardization in wallets to protect against that would be super helpful. I plan on trying to add a "Transaction Privacy Analyzer" to Live Wallet to help highlight the potential privacy issues in a bitcoin transaction, hopefully catching some of these errors before the transaction is broadcast. I noted about it recently here https://primal.net/e/note1xe2vq6sz83htekmt07f3j039vg2g6lp7pn0z0sjn6u9w3lg0628qvkz2sr

i know how to build a wallet server, have worked a lot with btcd building something that does much what i design is something i could definitely do and help facilitate an isolation between UI and coin control/wallet services so we divide our labor more efficiently

shame that primal still isn't doing quoting with the nostr protocol that link, in a form that opens in whatever client you are using looks like this: nostr:note1xe2vq6sz83htekmt07f3j039vg2g6lp7pn0z0sjn6u9w3lg0628qvkz2sr @miljan please make primal give standard nostr colon links for things and highlight the option, make it default for quote posts

Next, try the full privacy setup and consolidate your UTXOs inside a coinjoin transaction so you don't link any data about your on chain payments. Wasabi Wallet and BTCPay Server's coinjoin plugin allow you to keep your coins completely anonymous: https://mempool.space/tx/6bf12bce6ab061c37ce5ae4048f1b68e972b4bc61ed6c5d717c2a21dd7c18a7d